Adam+review+session+to+post

Adam+review+session+to+post - Review Session Mid-term...

Info iconThis preview shows pages 1–7. Sign up to view the full content.

View Full Document Right Arrow Icon
Review Session: Mid-term 2 (Selected Slides) Adam Larson
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Topics Tax Incidence Price controls and quantity restrictions: price floor, price ceiling, quota Consumer choice: utility maximization subject to budget constraint Production: marginal product, average product Costs: fixed cost, variable cost; total, marginal, average costs; firm behavior in competitive market Consultant questions
Background image of page 2
Tax Incidence Incidence on consumers greater with less elastic demand Incidence on producers greater with less elastic supply Inelasticity is expensive!
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
S + tax S D elastic D inelastic original eq’m price (relatively) inelastic demand incurs greater portion of the tax To see this: Compare relative sizes of red-bracketed distances.
Background image of page 4
Price Controls Price floor – minimum price Price ceiling – maximum price Quota – maximum quantity Non-binding: does not change outcome (price, quantity) from competitive equilibrium Binding: does change outcome (price, quantity) from competitive equilibrium
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
•Loose red triangle
Background image of page 6
Image of page 7
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 01/24/2011 for the course ECON 101 taught by Professor Gerson during the Fall '08 term at University of Michigan.

Page1 / 12

Adam+review+session+to+post - Review Session Mid-term...

This preview shows document pages 1 - 7. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online